In Real Estate, Go West and Prosper

Want to make money on your house? How long should you hold on to it? What regions in the United States are most conducive to building value?

The National Association of Realtors released a study this month that seeks to answer those questions by looking at historical data to determine whether homeowners are more likely to experience a home price gain or loss during the period when they hold a home.

In short, all regions of the United States – the Northeast, Midwest, South and West – saw home values increase when they held onto their homes over seven, eight, nine and 10-year periods between 1989 and 2019. The findings include:

  • The average price appreciation of a single-family home ranged from about 29 percent (seven-year tenure) to 39 percent (10-year tenure), or average gains of $38,000 to $49,500.
  • The largest average appreciation was in the West, where home prices increased 34 percent (over seven years) to 43 percent (10 years) with average gains of $57,300 to $72,000.
  • The South saw the next largest increase at 29 percent (seven years) to 40 percent (10 years) with average gains of $33,800 to $44,700.
  • The Midwest experienced home price appreciation ranging from 28 percent to 37 percent with average gains of $29,300 to $37,800.
  • In the Northeast, it ranged from 22 percent to 34 percent, with average dollar gains of $35,800 to $53,300.

In addition to looking at regions, the Realtors study examined home price appreciation in 177 metropolitan areas across the country. The biggest gainers (by percentage) over a 10-year period were:

  • Sherman-Denison, Texas: 111 percent
  • Port St; Lucie, Florida: 86 percent
  • Anaheim-Sta. Ana-Irvine, California 80 percent
  • Naples-Immokalee-Marco Island, Florida 77 percent
  • Miami-Fort Lauderdale-West Palm Beach, Florida 75 percent
  • Denver-Aurora-Lakewood, Colorado 73 percent
  • Nassau County-Suffolk County, New York: 72 percent
  • Punta Gorda, Florida 71 percent
  • Seattle-Tacoma-Bellevue, Washington 71 percent

On the downside, home prices in the Bridgeport-Stamford-Norwalk, Connecticut metropolitan area took a beating, falling 10.7 percent over a 10-year period. The Norwich-New London, Connecticut region also fell by 6.1 percent, while the Hagerstown-Martinsburg Maryland/West Virginia metropolitan area dropped by 4.4 percent.

The study also noted that home prices still experienced gains over seven to 10 years in metro areas in California, Florida, Nevada and New York that experienced significant price fluctuations during the Great Recession.

“While there was a negative gain (some)  observations (gain or loss for seven, eight, nine, 10 years across all metros across all years), this study shows that homeowners are more likely to reap home equity gains when they hold or stay in their home for seven, eight, nine, or 10 years,” the study concluded.